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Amid a difficult backdrop for oil markets, Bank of America has named Diamondback Energy as one of its top picks in the sector. Analyst Kalel Akamine upgraded Diamondback shares to buy from neutral in a Tuesday note. Meanwhile, he lowered his price target to $170 from $202. The new price objective indicates shares rising 23.3% from Monday’s close. According to Akamine, oil markets are currently facing a trade war as well as a price war due to unexpected supply hikes from OPEC+. As a result, he recommends “positioning with a combination of defense and value rather than defense in isolation.” “Within the largest and most liquid caps in our coverage universe, we believe that Diamondback offers the best combination of value and defense,” Akamine said in the research note. Diamondback shares have declined nearly 16% in 2025, which Akamine largely attributes to “the perception of a share overhang.” FANG YTD line Diamondback shares Although the analyst believes oil prices haven’t yet reached their trough, he assumes a de-escalation will come along in the price war. “While FANG has a levered balance sheet (1.6x net debt to forward 4 quarter EBITDA AT $60 WTI), a sustained drop in oil prices is not our base case, keeping our focus on near-term free cash flow capacity, where again FANG stands out from the pack,” Akamine added. —CNBC’s Michael Bloom contributed to this report.
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